Working Paper Series

working papers

The Institute for Money, Technology & Financial Inclusion (IMTFI) welcomes papers
from any academic discipline related to its thematic foci for the IMTFI Working Paper
Series. These foci include but are not confined to everyday uses and meanings of money,
mainstream and alternative currencies, mobile money for poverty reduction, and new
technological infrastructures to facilitate value storage, transfer, payment, and
exchange. The Working Paper Series is multi and inter-disciplinary in character.

IMTFI Working Papers

This white paper surveys the lessons from the first decade of research into mobile
money, focusing on an archive of studies produced by IMTFI Fellows. The paper describes
mobile money's primary use case—P2P money transfer—and argues that both the "Ps" and
the "2s" of this model (mobile money's "peers" and the technological and social infrastructures
that intermediate them) must be understood in context. The paper then outlines ten
insights from the IMTFI research archive that demonstrate the contextual complexities
involved in introducing and scaling mobile money, including discussions of: agent
networks; physical infrastructure; location, place, and space; kinship and family;
gender and gender inequality; class, caste, and rank; religion and ritual; time and
tempo; government and regulation; and the persistence of both cash and non-currency
stores of value. The paper concludes by raising issues that promise to be critical
provocations for the next decade of mobile money research, making an argument for
methodological diversity, and interrogating the limitations of the "financial inclusion"
frame within which mobile money has been situated as a development intervention. If
mobile money is, at its core, a technology of communication and circulation, it is
also a central means of distribution and redistribution. What would it mean, then,
to shift the conversation from debates over financial inclusion to questions about
financial justice?

In the retail industry, consumer credit is sometimes seen as a dangerous parasite
that can become bigger than its host. Credit cards are marketing devices that aim
at easing the attachment between consumers and goods. Credit cards are also value
meters that trace every single transaction. Credit cards can even be “gardening” tools.
Sowing is the name used in Chile’s retail industry to call the data management strategy
that consists of extending the credit limit of low income customers depending on their
payment behavior. Data on previous transactions and behavior replaces collateral.
Credit cards are not only used by the persons whose names are on the cards; People
borrow and loan their cards, or, more precisely, their cards’ credit limits. Credit
cards do not trace behavior but hidden networks. Can social relations act as parasites
on credit – uninvited guests whose host is already a parasite? This article tells
the story of a study that started in the middle – credit cards – and slowly became
a Serresian economic anthropology.

Almost all the micro-finance institutions (MFIs) in Kenya have introduced mobile money
to increase the convenience and speed of transactions, and to lower the cost of transferring
funds. Since most MFIs had already established their brick-and-mortar operations,
mobile money only complements their traditional approaches to serving their clients.
Musoni, a relatively new MFI, provides micro-finance purely through mobile technology.
This cashless model eliminates some administrative costs and makes transactions efficient
for both the customers and the MFI. The uptake has been impressive and the model is
believed to help reduce client groups’ meeting frequency, leaving customers more time
for business and increasing customer loyalty. The researchers proposed to establish
preliminary evidence of the impact of pure mobile money on the consumers of Musoni
services. The qualitative data was collected through focus group discussions and in-depth
interviews while quantitative data was collected via structured questionnaires. From
the study, it was observed that mobile money, when bundled with other products, became
more valuable to customers and made the other products more appreciated. There was
also an element of increased savings as a result of using mobile money. In addition,
there was an apparent shift to mobile money for other transactions.

This study provides insights into the ancient susu savings operation in Ghana and
the behavioral intention or willingness of susu collectors and users to adopt a mobile
money (MM) platform as part of their savings practices. More specifically, this study
investigates factors that determine one’s intention to adopt the MM space as a savings
channel, particularly in place of more traditional ways of saving among many people
in West Africa. The study reports many interesting findings but one that is striking
is the physical presence of the susu collector, which was found to be statistically
significant but having a negative influence on one’s behavioral intention to accept
MM. This, which was found to be the primary reason motivating susu users to honor
their savings commitment, is potentially an important factor in explaining why respondents
were not sure whether an MM platform would be an effective method of saving. While
MM uptake remains significantly low, the study findings suggest that the way to increase
uptake is to create more awareness, embark on financial literacy programs, and reduce
mistrust and perception of risk of the MM platform.

There is by now ample evidence that the poor lack access to basic financial services.
It is, therefore, no surprise that financial inclusion has become a focus of attention
for development professionals seeking to alleviate poverty around the world. However,
the nature of poverty and deprivation, the livelihood, and the financial needs of
the poor vary widely across different contexts. In India, for instance, the financial
needs and practices of the poor differ across rural and urban areas. An in-depth understanding
of the financial behavior of the rural and urban poor is essential for designing the
right product-mix that addresses their needs. Our study contributes to this goal by
examining how the rural and urban poor in the state of Tamil Nadu, India, manage their
money. We adopted the “Q-squared” methodology (combining quantitative and qualitative
methods) to gain a holistic understanding of the financial behavior of these two distinct
populations. We used financial diaries to collect data on income, consumption, savings,
borrowing and lending from a sample of poor households over a period of six months.
Our research subjects were mostly women. In general, the study found that these populations
shared a similar practice of diversifying portfolios of savings, borrowing and insurance
products. At the same time, the research found evidence of diverse financial needs
of the rural and urban poor. Mainly, the study found that the two disctinct populations
differ in (a) the activities for which they use the various financial tools and (b)
the degree of access to a diversified portfolio of services.

With mobile money technologies, people use mobile phones to send money to friends
and relatives, connect to bank accounts, and make payments. This research examines
the role of mobile money in Kenyans’ social and economic networks. Research reported
was conducted in Bungoma and Trans-Nzoia Counties in Kenya, and among Kenyans living
in Chicago, Illinois in the summer of 2012.

Although mobile money services are often described as a form of “banking,” most users
in Western Kenya use mobile money as a social and economic tool through which they
create relationships by sending money and airtime gifts. A wide range of mobile money
uses includes social gifting, assisting friends and relatives, organizing savings
groups, and contributing to ceremonies and rituals.

Even though mobile money was designed for person-to-person transfers, its practices
are best understood as created by collectivities and groups. In savings groups, groups
of siblings and other relatives, and communities who contribute to ceremonies, users
“save with others” through the entrustment of value to kin and friends and create
new groups and communities based around the “floating world” of mobile technology.
Individuals balance their social and economic capital in order to create marginal
gains and mediate the conflicts created between social obligations and personal economic
betterment. Ties to and through mothers are prominent in social networks of mobile
money flows. Matrilineal kinship ties are a means of sharing or circulating money
among those marginalized from access to other resources and forms of value.

In 2011, sixty-five percent of India’s population did not have access to a bank account
(Global Findex 2011). India has the second largest financially excluded poor in the
world with more than half of its population considered as financially underserved
At the same time, India is one of the fastest growing markets for mobile phones. Given
the rising mobile phone usage in the country, M-Banking has a great potential for
enabling financial inclusion of the poor. India has attained near universal telecom
access with one of the lowest–cost retail distribution networks. Among the myriad
M-banking services currently underway, EKO’s Simplibank offers one of the most promising
initiatives in mobile money operating on a low-cost banking platform. Launched in
2007 through a partnership between the start-up company EKO and the State Bank of
India (SBI), this mobile money service initially operated as a pilot project in the
cities of Delhi, Bihar and Jharkhand. By 2011, EKO had captured a wider consumer base
as a business correspondent of SBI through its new product for domestic remittances.
EKO partners with a network of agents—chemists, grocers, airtime vendors—to provide
banking services to people with no access to formal bank accounts.

This paper explores the everyday use and effects of EKO mobile banking. It discusses
findings from a recently concluded study of 160 customers, 20 customer service points
(CSPs)/agents, and key functionaries of EKO in Delhi.

Most studies of mobile money for the poor focus narrowly on questions of technical
design and pay little attention to the various needs of the poor and their complex
relationships with money and financial services. In order to fill the current knowledge
gap and to better inform the design of new mobile money systems for the purpose of
financial inclusion, this study investigates social relationships and payment practices
among the poor in rural Ethiopia. A study of existing payment practices in Ethiopia
is pertinent especially given the recent proliferation of various mobile money initiatives.
Two key questions face mobile money professionals and scholars of financial inclusion
alike: How will these mobile money initiatives reach out to the local population?
How will they incorporate existing (albeit unbanked) financial practices? This paper
aims to lay the ground for designing mobile money products and services that cater
to local institutions and practices. The paper, therefore, explores the social dynamics
of various local financial practices—informal savings and loans institutions, monetary
and non-monetary gifts, and payments to people with power and to deities.

This paper explores modernity and gender in a traditional society, focusing on the
informal storing of money among indigenous populations in the Philippines, through
69 semi-structured interviews and observations. In these indigenous populations –
Bontoc, Tagbanua and Higaonon – traditional forms of money are utilized side by side
the modern form depending on the type of transaction. Money storage patterns differ
by gender, arising from varying comfort zones, spending frequency, and amount of money
stored. Modernity reworks traditional gender relations between spouses where money
becomes a source of conflict, as they maintain tradition and absorb modern ideas of
individuality and empowerment.

The article focuses on the frameworks of calculation and margins of calculability
accessed by indigenous families in their financial practices. In a region that is
considered one of the poorest in Mexico and still largely based on a “milpa system”,
barter and the “reciprocal hand,” the indigenous way of life is facing important changes.
We argue that arithmetic is signified in the light of beliefs, fears and hopes in
the struggles for certainty and adaptation and negotiations with modernity.

This paper examines the various practices used to achieve income and consumption smoothing
amongst the poorest households in Yogyakarta, Indonesia. It looks at selected 125
households, representing 25 households in each of the five regions of the Yogyakarta
area. It designated how rural financial institution and other can help them to have
better smoothing strategy. We found that the behaviour varies in response to the types
of profession and gender. Furthermore, the source of the income fluctuation also matters
in determining households’ responses. However, the source of the consumption fluctuation
did not appear to differ across professions.

The important role that small ruminants’ husbandry play in the lives of women in rural
Nigeria cannot be overemphasised. This is attributable to the income generating potential
of these animals as it forms a major source of credit that is easily accessible to
these women in meeting immediate and urgent financial needs. Findings from our study
in southwest Nigeria indicated that about 68 percent of women in the study area utilised
part of the income generated from small ruminants’ rearing to meet the welfare needs
of their members and settle unforeseen financial demands such as paying hospital bills
(10.4 percent) and assisting relations in emergency situations (7.8 percent). However,
the most preferred of the small ruminants is goat because its consumption and marketability
has no religious or cultural restrictions and the least preferred is swine. Meanwhile,
because education and poverty status of respondents were found to be important determinants
of income realised from small ruminants' husbandry, there is the need to build capacity
of respondents through proper education and knowledge of family planning techniques
will help to moderate family size in the study area.

This study is an ethnographic account of the Shia population attached to Zardozi (embroidery)
in Lucknow, who are reeling under intense poverty and suffering as a result of pittance.
This study contributes to the linking of micro levels of analysis of money management
through informal financial network of Rotating Services and Credit Association (ROSCA),
popularly known as Beesi, among the poor skilled Zardozi (embroidery) workers in Lucknow.
The research facilitates verbatim accounts of embroidery workers about what they want,
what they expect of themselves and how they make their choices that they can make.
The study is open to a wide spectrum of readers belonging to developmental studies,
economics and microfinance who are interested in understanding real life situations
confronted by the poor in third world countries.

We combine the perspectives of the anthropology and sociology of money with user-centred
design to explore how the use of cash in rural and remote Papua New Guinea will shape
the use of mobile money. Drawing on 13 open-ended interviews, group interviews involving
100 persons, and participant observation over two visits to Morobe province in 2010
and 2011, we found cash is used for school fees, mobile phones, household goods, transport,
beer, cards, women and gifting to wantok, that is, people connected by descent or
place. Cash is individually controlled and women’s savings are often hidden in pandanus
walls or locked cupboards. Women control cash from gardens and the re-selling of betel
nuts and cigarettes. Men take the larger share of cash from coffee and control the
‘big money’ from mining. Mobile money, if appropriately designed, can reinforce the
privacy and security of cash and savings, facilitate gifting to wantok, and lead to
greater financial inclusion of women.

With support from the New Partnership for African Development (NEPAD), Vinya wa Aka
Group (VwAG), a women’s group from the Eastern part of Kenya, has trained 21 women’s
groups, in seven rural districts of the Province, on issues related to investment,
savings, money services and management. As part of that training, each group outlined
a strategy for resource mobilization, savings and investment with the aim of reducing
poverty within their families and communities. To build on the initial VwAG training,
the primary goal of this research study was to investigate the use and impact of mobile
money services (e.g. M-PESA, YU and Zap), among the 21 women’s groups, as a tool for
poverty reduction in Eastern Kenya. The methodology included in-depth interviews,
focus group discussion, participatory observations, review of secondary data and a
dissemination workshop, which will be the focus of this working paper.

The Nigeria Mobile Money Survey provides information on an unprecedented scale regarding
the Nigerian population’s knowledge and preferences about mobile money. IMTFI is pleased
to be able to offer insight into Nigerian trends based on this survey of over 4000,rural
and urban Nigerians from every region of the country. In light of the mobile money
industry’s interest in Nigeria, and the recent issuing of licenses by the Central
Bank of Nigeria to 11 mobile money businesses, we hope that the trends that we have
identified here will allow for a better understanding of this important area in its
own terms, not just in reference to the mobile money miracle of Kenya.